It has pulled money out of reserves: $600,000 one year, then $800,000 the next.

But with another year of declining property values, city officials say, they can't continue down the same path without shifting some of the burden to taxpayers.

So in addition to taking out another $800,000 from reserves, city commissioners this week proposed raising the millage rate to 3.7189 mills from the current 3.0674.

For property owners, that could mean higher tax bills. The owner of a home assessed at $150,000 with a $50,000 homestead exemption would pay $371.89 in taxes. Currently, that bill is $306.74.

At the old rate, Safety Harbor generated just under $3.2 million in ad valorem revenue for its general fund. At the new one, proceeds would grow to $3.5 million.

"It's time," said Commissioner Mary Lynda Williams, who added that Safety Harbor would still have one of the lowest rates in Pinellas even with the increase. "We need to raise our millage rate in order to reduce the impact to reserves until things can turn around."

The $13.4 million general fund budget that City Manager Matt Spoor presented to the council over several days this week originally recommended a 3.3580 millage rate and a $1.2 million withdrawal from reserves.

But neither idea sat well with the mayor and vice mayor.

"I know the reserves are there for a rainy day," Mayor Andy Stein­gold said, "but it was rainy last year, it's rainy this year coming up and I'm certain it's going to be rainy for a third year.

"I'm not saying (don't) spend it down. I'm saying slow down so you're not spending it down exponentially. Stick with a number that isn't growing year in and year out and that's what's happened. The number's grown."

Most disconcerting to Steingold and Vice Mayor Joe Ayoub was the millage increase.

"On one hand, it's good to have the additional money," Ayoub said. "But I'm struggling with the idea of, when everyone is struggling out there, asking people to pay more. I can't support raising taxes right now."

Williams said there was no way around it.

"We either have to reduce reserves or we have to increase the millage rate to bring in more money," she said. "We cannot have it both ways. So if we want to preserve our reserves, we need to increase our millage rate, which is very low. You can't keep cutting costs and cutting employees through voluntary out. Something's got to give. You cannot have it both ways."

The consensus of the commission was to take out the same amount of reserves this year that the city took out last year. But the vote on the tax rate was split 3-2, with Williams, Commissioners Nina Bandoni and Nancy Besore in favor of the 3.7189 rate and Ayoub and Steingold against it.

The number is just a proposal. The Pinellas County property appraiser requires that cities certify their tentative taxable values so it can send out truth-in-millage, or TRIM, notices to residents in August.

Based on feedback from public hearings, which are scheduled to begin Sept. 8, Safety Harbor commissioners can vote to adopt a lower rate, but not a higher one.

Because Spoor can tap only $800,000 in reserves and not the $1.2 million he requested, he must revise the budget he presented this week and find a way to trim $400,000 from somewhere.

His proposed cuts will be public record next week and Spoor said he plans to formally outline them at the Aug. 2 commission meeting.

"I'm going to give them a menu of cuts and then they can choose," he said.

Most of the cuts will most likely come from personnel, which accounts for 70 percent of the general fund budget. There will be no layoffs, but city employees may be asked to cover the cost of a 12 percent rise in health benefits, Spoor said.

They have already been asked to forgo merit pay and cost-of-living increases for one year.

"I can tell you that there's going to be hurt feelings amongst a staff that right now is struggling to keep its morale as high as possible," Spoor said. "The next several months is going to be difficult."

Rodney Thrash can be reached at rthrash@sptimes.com or (727) 445-4167.

Fast facts

Elsewherein North Pinellas

Oldsmar is proposing a millage rate of 4.05 for the third consecutive year. "I just want the citizens to know how really lucky we are that we don't have to raise the taxes," council member Linda Norris said at Tuesday night's meeting. "With four years of declining revenues, we're keeping the millage rate the same and that's not an easy thing to do."